Nanya Technology will start constructing a 12-inch-fab towards the end of the first quarter next year, and the company expects the new plant to ramp up production using 70nm trench technology in mid-2007, company spokesman Pei-lin Pai said yesterday.

Pai said Nanya’s parent company, Formosa Plastics, has given the go-ahead to build the 12-inch-fab, which will need an investment of NT$40-50 billion (US$1.2-1.5 billion).

The new fab will have a capacity of 24,000 wafers per month at its initial stage, which will be eventually ramped to 60,000 wafers, Pai said.

Pai said the completion of the plant is timed to meet strong demand expected in the DRAM market in mid-2007. The new plant will be a stable source of capacity for advanced process production, which will be necessary for Nanya to defend its market share, the company said.

Nanya currently has access to 12-inch capacity through Inotera Memories, a joint venture with Germany-based Infineon Technologies. In September while preparing to submit its IPO to the Taiwan Stock Exchange, Inotera said it expected to maintain a monthly output of 60,000 12-inch wafers in the fourth quarter.

The new Nanya fab will be located near its present manufacturing facilities in Taoyuan, northern Taiwan, on land belonging to its parent company.